Depreciation

Adjustments at the Balance Date and Preparation of Sole Proprietorship Financial Statements

MS: Susut Nilai · EN: Depreciation · ZH: 折旧

Meaning

Depreciation is the systematic allocation of the cost of a non-current asset over its useful life. It represents the fall or wearing away in the value of an asset due to use, the passage of time or obsolescence. Depreciation is recorded as an expense in the Income Statement each year. Common methods are the straight-line and reducing-balance methods.

Example

Selera Restaurant buys an oven costing RM10,000 with a useful life of 5 years and no residual value. Using the straight-line method, annual depreciation = RM10,000 / 5 = RM2,000 per year.

Source: DSKP KSSM Prinsip Perakaunan Tingkatan 4

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